Zomato CEO Deepinder Goyal
Zomato will be investing $150 million in debt to rescue cash-strapped quick commerce startup Blinkit, the company said in a stock filing on March 15.
Moneycontrol was the first to report that Zomato would invest around $100 million in the online grocer.
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The investment will happen in "one or more tranches" at an interest rate of 12 percent per annum with a tenure of not more than one year.
"This loan will support the capital requirements of GIPL in the near tern and is in line with our stated intent of investing up to $400 million cash in quick commerce in India over the next two years," said Zomato.
Blinkit last raised $100 million from Zomato in a round which gave the company a unicorn status.
The deal signals towards the beginning of a consolidation in the quick commerce space in India.
Blinkit last raised $100 million from Zomato in a round which gave the company a unicorn status.
The two companies are also in talks for a stock-swap merger which is likely to be a downround of $700 million. Blinkit's last round valued the company at over a billion dollars. The deal signals towards the beginning of a consolidation in the quick-commerce space in india.
The development happens at a time when Blinkit has laid off employees, shuttered dark stores, and delayed some vendor payments, amid intense competition in the quick-commerce space.
Blinkit laid staff from Mumbai, Hyderabad and Kolkata across segments such as riders, pickers and store managers. The company currently has over 2,000 people on its payroll and 30,000 ground staff. This layoff is likely to have impacted close to 5 percent of the overall strength.
This was an attempt to cut costs by Blinkit which spent Rs 600 crore between November and February to expand business and acquire customers in the cash-guzzling and deep-discounted grocery delivery space.
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It currently has close to 445 dark stores after shutting down approximately 40 of them in the last couple of months.
Last month Blinkit also signed a term sheet with Innoven Capital for debt worth $10 million which is coming in three tranches. The company received Rs 25 crore in the first tranche last month.
Besides Blinkit, Zomato has also announced a 16.66 percent stake acquisition for $5 million in robotics firm Mukunda Foods. Mukunda is a food robotics company that designs and manufactures smart robotic equipment to automate food preparation for restaurants.
Their products enable restaurants to scale while maintaining consistency in food quality and customer experience across multiple outlets.
In February, Zomato said it had set aside $400 million to invest in quick commerce stating that this category offers a "huge addressable market" and is synergistic with its food delivery business.
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